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The U.S. and European stock markets closed with mixed results, as the stock rotation cycle obtained new momentum. We see a rally in value stocks that may spearhead the market into other sectors as investors seek more value in “unappreciated” stocks.
Since early December, we have seen the shift from stocks that benefited from the pandemic towards those affected by it. As the massive vaccine distribution continues, we shall see further change in that direction. In Europe, the Stoxx 600 closed at 224.71, down 0.56, or 0.25%, and the FTSE 100 closed at 6,939.58, up 49.09, or 0.71%.
The corporate earnings season began Wednesday with JPMorgan Chase and Goldman Sachs crushing forecasts and Wells Fargo beating estimates. We discuss their results below:
- Goldman Sachs (GS) reported record quarterly net revenues of $17.70 billion, more than double in the first-quarter (1Q) of 2020; record quarterly net earnings of $6.84 billion; and annualized return on equity (ROE) of 31.0%, the highest quarterly ROE since 2009. The stock closed at $335.74, up $8.06, or 2.46%.
- JPMorgan Chase (JPM) reported revenue of $32.3 billion, managed revenue of $33.1 billion, net income of $14.3 billion, an ROE of 23% and Return on Average Tangible Common Shareholders’ Equity (ROTCE) of 29%. The stock closed at $151.30, down $2.769, or 1.81%.
- Wells Fargo & Co. (WFC) reported revenue of $18.06 billion and 1Q2021 Net Income of $4.7 billion and ROE of 10.6%, and ROTCE of 12.7%. The stock closed at $41.94, up $2.15, or 5.40%.
Wall Street summary for April 14, 2021:
- The Dow Jones Industrial Average closed at 33,730.89, up 53.62 points, or 0.16%.
- The Standard & Poor’s 500 closed at 4,124.66, down 16.93 points, or 0.41%.
- The Nasdaq Composite Index closed at 13,857.84, down 138.26 points, or 0.99%.
- The Birling Capital Puerto Rico Stock Index closed at 2,463.47, up 25.98 points, or 1.04%.
- The U.S. Treasury 10-year note closed at 1.64%
- The U.S. Treasury 2-year note closed at 0.16%.